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GSE tops global equity markets

Author: — IGS Financial Services/GB
Kofi Yamoah, MD of GSE
Kofi Yamoah, MD of GSE

The Ghana Stock Exchange (GSE) extended its bullish run to catch international attention as the best performer on the global equity market after recording over 20 per cent gains according to Bloomberg.com

This was on the back of improving investors’ sentiment about the prospects of the domestic economy. Robust economic growth, relative stability of the local currency and improving fiscal space were some factors driving the investors’ optimism of  the local bourse.
 
The GSE Composite Index, thus, advanced by 3.65 per cent to settle at an index level of 3,147.19 points, reflecting a year-to-date return of 22.00 per cent. The GSE Financial Stock Index also rose by 5.37 per cent to settle at 2,945.65 points, representing a year-to-date return of 27.48 per cent. 
 
Price movements
 
In spite of the bullish outturn of the equity market, trades were significantly lower than observed in the previous trading week. Total traded volume stood at 1.42 million shares value at GH¢ 4.09 million as compared to the 2.28 million shares valued at GH¢16.56 million recorded last week.
 
Societe Generale Ghana Ltd and HFC Bank Ltd were the most actively traded stocks as they accounted for 48.04 per cent of the total traded volume. Market capitalisation, however, increased by 1.46 per cent to settle at GH¢63,166.71 million.
 
On the laggard’s list, Fan Milk Ltd suffered a heavy decline of GH¢1.19 to trade at GH¢16.50 per share. Access Bank Ghana Plc and GCB Bank Ltd shed 31 pesewas and 10 pesewas to trade at GH¢3.50 and GH¢7.40 per share respectively.
 
CAL Bank Ltd, Enterprise Group Ltd and Standard Chartered Bank Preference Share were some other financial stocks which recorded losses in the trading week. Other laggards were Total Petroleum Ltd and Starwin Products Ltd. 
 
Govt securities
 
The yields on the short-dated treasury securities eased marginally in the week under review. The yield on the 91-Day T-Bill softened by three basis points to settle at 13.32 per cent whereas the yield on the 182-Day T-Bill declined by two basis points to settle at 13.89 per cent. The yield on all other treasury securities, however, remained unchanged.
 
At the auction, the government accepted all the GH¢489.20 million bids tendered. This makes the week’s target of GH¢1,087 million unachievable. The 1-year note dominated the government’s purchase as it constituted 51.15 per cent of the total bids accepted. At the next auction, the government hopes to raise GH¢408.00 million worth of the 91-Day and 182-Day T-Bills and GH¢200.00 million of the 2-year note. Presented below is the yield curve of the Government of Ghana Treasury securities.
 
Commodities

Brent crude oil lowered as investors locked in profits in the week under review following their worries about the potential impact of the revamping oil production in the US. Crude oil significantly rose by 6.8 million barrels in the week ended  January 26, 2018 to disrupt a 10-week consistent declines. Brent crude oil, thus, lost US$2.24 to trade at US$68.28 per barrel. 
 
Gold closed lower as the sudden rebound of the greenback on the last trading session of the week trimmed demand for the safe-haven commodity. Bullish labour market data helped the greenback recover some of its losses to make the yellow metal relatively expensive for non-dollar holders. Gold, thus, dipped by US$25.10 to trade at US$1,332.10 per ounce.
 
Cocoa benefited from the poor climatic conditions in top – growers to recover some of its recent losses. The soft crop improved by US$45.00 this week as the dry climatic conditions in Ivory Coast hampered production. Cocoa, thus, traded higher at US$2,041.50 per metric tonne on Friday.
 
Coffee recorded losses due to the rise in supply of the soft crop onto the international commodities market. Data released this week saw Brazil increasing its export by 2.62 million bags in January up from the 2.58 million bags in December and 2.46 million bags observed in January 2017. Coffee went down by five cents to trade at US$1.21 per pound.